And, looking forward, some analysts are predicting that the effects of the coronavirus recession could affect the economy for 10 years. The Congressional Budget office recently cut their 2020-2030 outlook for U.S. economic output by $7.9 trillion dollars or 3% of GDP.

So, if you’re looking for extra income, it’s going to be a lot harder to find.

The main problem is that the velocity of money, or how fast money changes hands, has been disrupted. According to the Federal Reserve, almost 40% of low-income households reported a job loss in March. This is especially bad news for businesses based on credit, like sup-prime vehicle loans and credit card debt.

This has resulted in credit card limits being cut and about three million vehicle loans being put in financial hardship programs. All of which is making it even harder for the velocity of many to immediately reaccelerate.

There’s also an issue with earnings growth, or lack of, I should say. For the second quarter, earnings are estimated to fall 14.6% and sales up a measly 0.8%. That growth doesn’t begin to compare with the stocks I’m finding in, for example, Accelerated Profits.

Now, here’s the good news: A V-shaped recovery may be underway…depending on which jobs data you’re reading.

For private-sector payrolls specifically, April’s report from ADP was its worst ever, with an overall decline of 19.6 million jobs. Then in May, according to ADP, private payrolls fell another 2.8 million.

But then the U.S. Labor Department released an incredible May jobs report. According to the government, 2.5 million jobs were added! The unemployment rate dropped to 13.3%, below economists’ estimates for 19% and the 14.7% unemployment rate in April.

Both ADP and the Labor Department figures were far afield of expectations – in opposite directions. Economists had estimated that ADP payrolls would drop 8.75 million, while the overall government jobs report would drop 7.5 million.

I’ll admit, I’m confused by how wide the discrepancy is here. While we all hope that a V-shaped recovery did kick off in May, we’ll just have to watch for any significant revisions that may pop up in the coming weeks. There have been questions raised by market-watchers and the Bureau of Labor Statistics itself about how the methodology should work in these unprecedented times.

Meanwhile, with much of the country re-opening, manufacturing data is also looking up. The Commerce Department reported that core orders, which represents business investment declined 5.8% which was much better that the consensus estimate of a 15.4% decline. So, as orders and durable goods begin to improve over the next few months, so will the manufacturing activity.

Consumer confidence is also improving over the past few months so we could see consumer spending rapidly increase in the upcoming months. If that happens, the velocity of money will also rapidly improve to help erase the recent economic damage.

Fed Chair Jerome Powell revealed that he isn’t anticipating a V-shaped recovery here in the U.S. Powell stated, “The recovery may take some time to gather momentum,” and he expressed concerns that a steep economic downturn could “leave behind lasting damage” to the U.S. economy. This simply means that key interest rates will remain ultralow for the foreseeable future. This ultralow interest rate environment will also continue to support higher stock prices.

While a full recovery could likely take 10 years, the bottom line is you can’t wait for 10 years to invest if you need income now. So, if you’re looking for income, the stock market remains the best game in town.

Wednesday, June 3, was the 50-day mark, and the S&P 500 has surged more than 39% during this time. According to the folks at Bespoke, this is the S&P 500’s biggest 50-day move in more than 75 years. And this 50-day surge bodes well for market strength in the coming months.

In fact, there have been two other instances since 1952 where the S&P 500 has rallied 30% or more in 50 days, and those surges were followed by even higher levels in the next one, three and six months. As Bespoke so eloquently stated, “Those two short-term massive spikes turned out to be the first inning of multi-year bull markets.”

Considering that there were only two previous instances of more than 30% gains in a 50-day period, Bespoke expanded their data to look at 50-day gains of 20% or more. And guess what? In the seven previous occurrences, the S&P 500 had gained an average 10.08% in the next six months. So, recent market action is very, very bullish.

For example, one of my recent sells in Accelerated Profits, Paycom Software, Inc. (PAYC) locked in a 256% return. Out of the 39 stocks on my Accelerated Profits Buy List, there are four other stocks sitting in the triple digits, 20 up in the double digits, and only four are negative. Clearly, the best defense remains a strong offense of fundamentally superior stocks.

Overall, I remain cautiously optimistic. There is no doubt in my mind that third-quarter GDP growth will likely set an all-time record. But there will still be winners and losers in this confusing economic environment. That’s why I recommend that we stay focused on stocks with superior fundamentals, positive analyst revisions and solid guidance.

]]>The Bottom Line for Marijuana Stocks Nowhttps://navelliergrowth.com/uncategorized/2020/06/20200605/
Fri, 05 Jun 2020 20:15:18 +0000https://navelliergrowth.com/?p=5371It’s been more than two months since stocks hit a bottom (on March 23). If I’d have asked you which sectors would perform best afterwards, I bet few of you would have guessed marijuana stocks! After all, the group has been down in the dumps for more than a year. Yet the ETFMG Alternative Harvest ETF (MJ) is up roughly 47%.

For context, that’s better than technology stocks (+44%) and even health care stocks (+39%); it’s nearly twice the gain in consumer staples over the time period.

There’s a few things that might be going on here. During the COVID-19 pandemic, 30 U.S. states have allowed dispensaries to continue operating as “essential businesses,” particularly for medical cannabis. But, long-term, investors are looking forward to full legalization in states like New Jersey and New York. Then, marijuana bulls say, that would pressure the U.S. government to legalize federally – and open up a multi-billion-dollar market.

However, in this industry, there’s hopes for the future, and then there’s what the numbers are telling us now. Numbers are where I take my cues for Accelerated Profits and my other Buy Lists. So, that’s what I’d like to lay out for you today.

On the “bad publicity” side, Canopy Growth (CGC), by far the biggest pot stock by market cap, announced a $1 billion net loss in the first quarter. Assuming that the marijuana industry’s best days are still ahead, investors are used to negative “earnings,” and prefer to focus on the companies’ tendency towards huge revenue growth. Yet in this earnings report, Canopy Growth turned in revenues that were just 15% higher, year-over-year. That’s less than half the growth analysts had expected.

Its fellow Canadian marijuana giants reported a mixed bag. Cronos (CRON) beat widely on earnings but fell well short on revenue estimates. On the flip side, Tilray (TLRY) reported a larger quarterly loss than expected, but beat on revenues!

In the bullish corner, Aphria (APHA) posted revenues and earnings that were twice what analysts had anticipated. GW Pharmaceuticals (GWPH), the British company that makes the seizure drug Epidiolex, also beat Wall Street expectations on both fronts. Revenues grew 207%, year-over-year, and a net loss of $8 million was far less than -$50 million in the year-ago quarter.

What really got people excited was Aurora Cannabis (ACB). The stock is up about 110% after Aurora’s quarterly release on May 14. ACB beat on revenues, with 23% year-over-year growth, and said it expects to be profitable next year.

Well, when I run these stocks through my eight fundamental metrics and Quantitative Score, here’s the bottom line from Portfolio Grader:

In fact, Aurora Cannabis actually rates a “Strong Sell.” Take a look at the Report Card for ACB:

Sure, there’s Sales Growth. Sure, it’s gotten positive Analyst Earnings Revisions. But when you take a closer look at the fundamentals, Aurora falls short on its profitability metrics, and its “war chest” is pretty light, with an “F” for Cash Flow.

But the worst strike against ACB is the “F” for its Quantitative Grade. Evidently, Wall Street turned against the stock after Canopy Growth fell short last week. Aurora has also got some very pricey acquisitions in the pipeline, between its MedReleaf deal in Canada and its new buyout of the U.S. CBD store Reliva.

There’s a lot for marijuana investors to like here, including an “A” for Sales Growth. But most of its other scores are lackluster, and that includes the Quantitative Grade of “C” that indicates institutional buying pressure.

At the end of the day, I don’t buy based on hopes and dreams. I buy based on profits and future earnings growth that will give stocks true staying power over the longer term.

And for a lot of pot companies, that’s a big question mark. There are lots of varieties and differences in experience when it comes to marijuana, and nothing has been settled on what works best for the marketplace. Vaping is an unknown, in terms of long-term effects. And the CBD market is booming, but without regulations, the quality is very mixed.

Now, am I completely against the marijuana space? Absolutely not.
I just prefer to focus on the companies that have already proven their profitability with track records of solid growth. The “legit” ones, if you will.

For example, in my Accelerated Profitsservice, I once recommended Shopify, Inc. (SHOP), a Canadian company that includes cannabis in its online store. At the time of my recommendation in January 2019, the company had posted an average 211.7% earnings surprise in the previous four quarters.

The result for my subscribers? We locked in a solid 46% profit in SHOP in just three months.

My latest buy alert on Wednesday was for a little-known electronics manufacturer. That might not sound exciting, but the company more than doubled its earnings, year-over-year, and does 100% of its manufacturing here in the United States. With global supply chains breaking down or stretched thin lately, that’s a big plus. With an “A” for both fundamentals and the Quantitative Grade, the stock’s a “Strong Buy” now.

]]>How to Take Advantage of the Coming ETF Realignmenthttps://navelliergrowth.com/uncategorized/2020/06/20200604/
Thu, 04 Jun 2020 20:17:18 +0000https://navelliergrowth.com/?p=5366Investing is a balancing act. Literally. As a growth investor, not only do I need to own the best stocks, but I must also own the right mix of stocks to limit my risk and maximize my profits.

Personally, I follow the 60%/30%/10% rule. This means that 60% of my portfolio is allocated to conservative stocks, 30% to moderately aggressive stocks and 10% to aggressive stocks. This way my portfolio is the perfect mix of stocks that will protect and grow my wealth while also giving me the exposure to the kind of home run stocks that will increase my returns. The proportions I’d recommend for you depend on your personal risk tolerance and goals, which is why, at Platinum Growth Club, I provide an Allocation Tool for our Model Portfolio.

The other part of limiting risk and maximizing profits is “equal weighting” my stocks. Many investors fall into the trap of having too much exposure to one stock. When you have a big winner, it can easily dominate your holdings. While I fully believe in letting your winners run, you have to do it safely. My rule of thumb is to never let a single company represent more than 10% of your portfolio.

Exchange-traded funds (ETFs) allocate a bit differently. An ETF is a bucket of stocks that can track the major indices, a particular sector or even gold and commodities. Most of them follow a quantitative strategy, but unlike my Model Portfolio, few of them are actively managed by a human being. For example, most ETFs are “capitalization weighted.” So, the higher the stock’s market cap, the more heavily weighted.

Traditional vs. Smart Beta ETFs

Consider the SPDR S&P 500 ETF (SPY), a traditional ETF that tracks the S&P 500. Out of its Top 10 holdings, Microsoft (MSFT) sits at number one, with a $1.39 trillion market cap and a 5.52% weighting. JPMorgan Chase (JPM) is the 10th holding, with a $332 billion market cap and a 1.20% weighting. As the S&P 500 buys and sells stocks and weightings shift, the SPY has to rebalance and make those changes, too. After all, it is tracking the index.

However, smart beta ETFs take another realignment approach. These ETFs are filled with high-quality stocks with strong fundamentals, sales and growth that can outperform the market.

So, when a smart beta ETF rebalances, it’s not solely about the weighting of the stock. The quality is just as important. It kicks out stocks that are weakening and replaces them with more fundamentally superior stocks. Smart beta ETFs typically rebalance every 90 days, which means that the next big rebalance will come in the next few weeks.

And I couldn’t be more excited.

As you know, I only invest in fundamentally superior companies. So they tend to see a significant increase in institutional buying pressure during the smart beta ETF realignment period, which in turn drives the companies’ stock higher.

Case in point: Repligen Corporation (RGEN). The stock is currently held in 76 smart beta ETFs, and is also one of the Top 10 holdings in the iShares Russell 2000 ETF (IWM), which tracks small-cap stocks.

Now, here’s how we know RGEN is fundamentally superior: For its first quarter of 2020, the company posted record results. Revenue jumped 25% year-over-year to $76.1 million, up from $60.6 million in the first quarter of 2019. Analysts were expecting revenue of $71.19 million.

First-quarter operating income rose to $11.9 million, compared to $11.2 million in the same quarter a year ago. Adjusted operating income climbed 18% year-over-year to $18.3 million. Repligen also reported adjusted earnings of $0.32 per share, or 23% annual earnings growth. Analysts were looking for earnings of $0.21 per share, so Repligen posted a stunning 52.4% earnings surprise.

Looking ahead to fiscal year 2020, Repligen reiterated its previous outlook. Despite the economic downturn, the company still expects to achieve total revenue between $309 million and $319 million, or 14% to 18% annual revenue growth. Adjusted earnings per share are forecasts to be between $1.09 and $1.14, which is up from previous guidance for earnings per share of $1.07 to $1.12.

For smart beta ETFs looking for a high-quality stock, RGEN fits the bill to a “T.”

I added RGEN to my exclusive Platinum Growth Club Model Portfolio in July 2019, and it’s up almost 50% since then. And given its strong fundamentals and exposure to institutional buyers, I see significant upside ahead.

Tomorrow, I will be sharing my latest thoughts on Repligen in my June Monthly Issue of Breakthrough Stocks, as well as releasing my newest Breakthrough Stocks recommendation. All Platinum Growth Club members will receive the issue, as well as my weekly updates for Growth Investor and the Platinum Growth Club.

If you’re interested, go here to see more and give us a try. Once you do, you’ll have access to all my newsletters, reports, Buy Lists, the exclusive Model Portfolio and Allocation Tool. As I alluded to earlier, my handy Allocation Tool will show you how to blend the stocks in the Model Portfolio – right down to the number of shares you ought to own. As any institutional investor like the ETF companies can tell you, allocation is very important to maintaining a successful portfolio, and this Allocation Tool can help you do just that.

]]>Which Chinese Stocks Will Be Impacted By the New Senate Bill?https://navelliergrowth.com/uncategorized/2020/06/20200602/
Tue, 02 Jun 2020 20:04:56 +0000https://navelliergrowth.com/?p=5363It’s going to be a long, hot, tense summer. And that includes U.S.-China relations. I’ve been having readers ask me, “Are they going to ban Chinese stocks from listing in America?”

The short answer is: No. And I’ll explain further, but first, I’d like to address why folks are wondering this.

Muddy Waters Capital, a research firm that specializes in accounting fraud and “serious fundamental problems,” is getting ready to do a big presentation at Berkeley Law School. Its founder has a scheduled talk there on June 23 for “Fraud Fest 2020,” and he insists that Chinese companies are pretty much all fraudulent.

That’s just not true, folks. A lot of Chinese companies follow all the rules.

Some don’t, and these are the ones you hear about in the news. The “Starbucks of China,” Luckin Coffee (LK), is one example. Luckin was caught faking $310 million worth of sales, and it will be delisted from the Nasdaq in the next few weeks…but not before losing $12 billion in market cap since January.

In May, both Republicans and Democrats in the U.S. Senate responded with the “Holding Foreign Companies Accountable Act.” It just passed two weeks ago; now it’s headed to the House of Representatives. The bill reemphasizes that all companies have to allow annual audits by the U.S. Public Company Accounting Oversight Board (PCAOB). If a company fails to comply and gets three strikes, then they’re out – off the American stock exchanges.

Ultimately, Chinese stocks are being held to the same standard as any other stocks, and I agree with that. I’ve never had any problems with any of my Chinese stocks…all of which I’ve checked personally into their fundamentals.

Companies everywhere want the credibility of listing on the NYSE or the Nasdaq. It says, for example, that your company follows “corporate governance” standards, like a majority independent Board of Directors. (In the new Senate bill, Chinese companies must disclose any government control.)

Similarly, it boosts credibility when a foreign company has a U.S. bank vouching for them and combing through all the books. These are the companies that trade as American depository receipts (ADRs). Among Chinese stocks, that group includes Vipshop Holdings (VIPS), which soared more than 8% on its first-quarter earnings report. (I added VIPS to my Accelerate Profits Buy List a few weeks prior to the earnings announcement – so our position is up more like 15%.)

That’s not to say that Chinese stocks won’t face further volatility. As the Senate bill gets debated in the House of Representatives, the non-ADR Chinese stocks might get hit…but not the quality ADRs.

When I talk about “high-quality stocks,” I’m thinking back to my own days as a corporate accountant. Companies will share whatever earnings calculation looks best – but then they’ll also report earnings according to generally accepted accounting principles (GAAP).

For the record, Vipshop Holdings has not shied away from the required PCAOB audits I discussed earlier. And VIPS hasn’t had a problem with GAAP earnings, as the chart below demonstrates. In fact, the actual results (orange bars) have generally been well above Wall Street analyst estimates (blue bars).

Source: Ycharts

That includes Vipshop’s latest quarter, which beat expectations on revenues as well as earnings. First-quarter revenue came in at $2.7 billion, versus expectations for $2.54 billion…in addition to the GAAP earnings per share (EPS), which as we saw above came in double the consensus estimate.

In total, I’ve hand-picked six Chinese stocks for Accelerated Profits. Five of these six companies posted stunning earnings results for the most-recent quarter. In fact, they posted an average 51.8% earnings surprise. And they’ve held up fine even with the Senate bill cracking down on audit-dodgers. All of our current Buy List holdings do comply with these standards, and the bill will not affect them.

Now, that’s not to say there aren’t bubbles out there in the market – and short-sellers trying to “prick” them. I worry immensely about the electric vehicle (EV) industry, for example. Europe is carrying Tesla (TSLA), and Europe had a huge drop in overall sales, including EV sales. EV sales are down dramatically in both the United States and China for the last three quarters. But we’ll see.

]]>Weekly Upgrades and Downgradeshttps://navelliergrowth.com/uncategorized/2020/06/20200601/
https://navelliergrowth.com/uncategorized/2020/06/20200601/#respondMon, 01 Jun 2020 16:33:36 +0000https://navelliergrowth.com/?p=5361During these busy times, it pays to stay on top of the latest profit opportunities. And today’s blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for 61 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.

This Week’s Ratings Changes:

Upgraded: From Hold to Buy

Symbol

Company Name

Quantitative
Grade

Fundamental
Grade

Total
Grade

ALXN

Alexion Pharmaceuticals, Inc.

B

B

B

ATUS

Altice USA, Inc. Class A

B

C

B

CHRW

C.H. Robinson Worldwide, Inc.

B

C

B

CMI

Cummins Inc.

B

C

B

CMS

CMS Energy Corporation

B

C

B

COO

Cooper Companies, Inc.

B

C

B

CTVA

Corteva Inc

B

C

B

DB

Deutsche Bank AG

B

C

B

FRC

First Republic Bank

B

B

B

LHX

L3Harris Technologies Inc

B

C

B

MRK

Merck & Co., Inc.

B

B

B

PAGS

PagSeguro Digital Ltd. Class A

B

C

B

PCAR

PACCAR Inc

B

D

B

SIRI

Sirius XM Holdings, Inc.

B

B

B

T

AT&T Inc.

B

C

B

TM

Toyota Motor Corp. Sponsored ADR

B

C

B

VZ

Verizon Communications Inc.

B

C

B

Upgraded: From Sell to Hold

Symbol

Company Name

Quantitative
Grade

Fundamental
Grade

Total
Grade

AGR

Avangrid, Inc.

D

C

C

AMTD

TD Ameritrade Holding Corporation

D

B

C

BAC

Bank of America Corp

C

C

C

BK

Bank of New York Mellon Corporation

D

B

C

FDX

FedEx Corporation

C

C

C

HAS

Hasbro, Inc.

C

C

C

JPM

JPMorgan Chase & Co.

C

D

C

MFG

Mizuho Financial Group, Inc.

C

C

C

MUFG

Mitsubishi UFJ Financial Group, Inc.

C

C

C

PNC

PNC Financial Services Group, Inc.

C

C

C

PSA

Public Storage

D

C

C

RF

Regions Financial Corporation

C

D

C

SCHW

Charles Schwab Corporation

C

C

C

UL

Unilever PLC Sponsored ADR

D

C

C

VMW

VMware, Inc. Class A

C

B

C

WAT

Waters Corporation

C

D

C

WBA

Walgreens Boots Alliance Inc

C

C

C

WELL

Welltower, Inc.

D

C

C

Downgraded: From Buy to Hold

Symbol

Company Name

Quantitative
Grade

Fundamental
Grade

Total
Grade

AZO

AutoZone, Inc.

B

C

C

BURL

Burlington Stores, Inc.

B

F

C

ELS

Equity LifeStyle Properties, Inc.

C

C

C

ENIA

Enel Americas S.A. Sponsored ADR

C

C

C

IFF

International Flavors & Fragrances Inc.

C

C

C

NVR

NVR, Inc.

C

C

C

PEP

PepsiCo, Inc.

C

C

C

RELX

RELX PLC Sponsored ADR

C

C

C

SCCO

Southern Copper Corporation

B

C

C

SSNC

SS&C Technologies Holdings, Inc.

C

B

C

TAP.A

Molson Coors Beverage Company Class A

B

D

C

Downgraded: From Hold to Sell

Symbol

Company Name

Quantitative
Grade

Fundamental
Grade

Total
Grade

ACGL

Arch Capital Group Ltd.

D

C

D

BMA

Banco Macro SA Sponsored ADR

D

B

D

CNQ

Canadian Natural Resources Limited

C

D

D

DIS

Walt Disney Company

D

D

D

ENB

Enbridge Inc.

D

D

D

EQR

Equity Residential

D

B

D

GIB

CGI Inc. Class A

D

B

D

GM

General Motors Company

D

C

D

KEP

Korea Electric Power Corporation

D

C

D

LNG

Cheniere Energy, Inc.

F

A

D

PAYX

Paychex, Inc.

D

B

D

TLK

PT Telekomunikasi Indonesia

D

C

D

UDR

UDR, Inc.

D

C

D

ULTA

Ulta Beauty Inc

D

D

D

YUM

Yum! Brands, Inc.

D

C

D

To stay on top of my latest stock ratings, plug your holdings into Portfolio Grader, my proprietary stock screening tool. You may get started here.

Sincerely,

Louis Navellier

]]>https://navelliergrowth.com/uncategorized/2020/06/20200601/feed/0Why I Just Sold This Ultimate Growth Stockhttps://navelliergrowth.com/uncategorized/2020/05/20200530/
Sat, 30 May 2020 13:00:01 +0000https://navelliergrowth.com/?p=5359It’s time to look ahead to June. While I hope that you’re able to get out and about in the warm, fresh air, there are some investing actions to take first.

Since the days seem to be crawling by and, somehow, also flying by, let me remind you: We’re coming up on the end of the second quarter.

This is a time when fundamentally superior stocks step into the spotlight. Here’s why: Many institutional investors will shore up their portfolios before the end of June. Smart beta and equally weighted ETFs are also rebalanced every 90 days.

This quarter-end “window dressing” creates forced buying pressure in the best-performing stocks from the quarter. In other words, companies with strong forecasted earnings and sales growth will attract a lot of attention in mid-June, and their shares will bounce higher.

Here’s the flip side of that coin: Not every company can maintain the earnings momentum that Wall Street will demand from stocks going forward, as the market continues to “narrow.”

In fact, according to FactSet, the S&P 500’s second-quarter revenue is forecast to drop 11.5% on average. Second-quarter earnings are now expected to plunge 42.9% on average!

My Accelerated Profits stocks are a sharp contrast to that. The supercharged growth stocks I’ve been finding are characterized by 21.7% forecasted sales growth and 101.4% forecasted earnings growth. Any money manager is going to look at that relative strength – and create intense buying pressure in those stocks. (While leaving other companies in the dust.)

And obviously, I’d like to maintain those stats. So, given slowing earnings momentum and lowered analysts’ estimates, I recommended that we book our triple-digit gain in Paycom Software, Inc. (PAYC) yesterday for Accelerated Profits and a few other portfolios.

Paycom Software might sound familiar to you, too, if you’ve been following me here in Market360. In January I shared that PAYC had been called up to the “big leagues”: the S&P 500. As recently as April 29, PAYC was surging on a first-quarter earnings beat.

Well, again, this is the second quarter now!

To help put you on the right side of the significant rotation I expect here in June, I’d like to share exactly why I decided to cut PAYC loose – and take our 260% profit off the table.

I still think that Paycom Software has a “great business model,” which involves cloud-based management systems for the complete employment life cycle, including recruitment, hiring, termination and retirement, as well as payroll.

But when you look at PAYC’s latest Report Card in my Portfolio Grader, there are some warning signs:

Paycom’s Cash Flow is looking mediocre, coming in with a “C” grade. Now, I used to do corporate accounting; that is why you never see bank stocks in my portfolios, because I know all about their “creative accounting” practices. For instance, if you take two money-losing subsidiaries and merge them together, sometimes they can earn money. Many companies can still portray themselves as “profitable” – but the cash flow never lies.

Until now, many companies could slide by without a huge “rainy day fund.” Now that we’re in a global recession, and many customers are cutting expenses or unable to make payments, companies need a strong cash position.

But PAYC also gets a “C” for Earnings Surprises…and a “D” for Earnings Momentum.

Looking forward, Paycom Software is among those companies who are suffering the fallout from the coronavirus pandemic. Many businesses have reduced staff and operations, which has limited their need for Paycom Software’s products. As a result, the analyst community has lowered their second-quarter earnings forecasts by 21.6% in the past week alone. Second-quarter earnings are now expected to dip 8% year-over-year.

This was my cue to recommend exiting PAYC.

Now, it’s not always easy to say goodbye to a strong winner…particularly when it still technically rates a “Buy” in Portfolio Grader.

But, if I leave you with one piece of advice, let it be this: Never “fall in love” with stocks. They simply cannot love you back. And there’s no reason they can’t turn on you, when the underlying fundamentals start to go south.

The bottom line is, we’ll be taking our capital like the 260% profit in PAYC – and deploying it into more exciting stocks, like the ones for The Accelerated Income Project.

Note: On Thursday, I released two new buys for Accelerated Profits: a tech manufacturer and a diagnostics company. They may sound very different – but crucially, both have the fundamentals required to keep them firing on all cylinders.

Both companies have been beating expectations and seeing Wall Street analysts revise future expectations higher. This is a reliable signal of a big stock surge – and I don’t want you to miss out.

]]>How to Keep Overconfidence From Sinking Your Portfoliohttps://navelliergrowth.com/uncategorized/2020/05/20200528/
Thu, 28 May 2020 20:30:53 +0000https://navelliergrowth.com/?p=5356Psychology is responsible for many of our worst blunders – if left unchecked. We’ve talked a bit about psychology in my Accelerated Income Guide, including Recency Bias yesterday and Crowd-Seeking Bias last Sunday.

You see, the more you know about the workings of your own mind, the “bugs” inside it, and how they work against our investment performance, the more you can develop strategies to mitigate the negative effects of those bugs.

In today’s essay, we’ll talk about the challenge investors face: Overconfidence. I’ll detail overconfidence bias, how it works, and how you can neutralize its negative effects.

Let’s get started.

Confidence vs. Overconfidence

First, let me get something out of the way: Confidence is a good thing.

Without it, you wouldn’t do many of the things that make life great. Whether it’s applying for a job, asking someone for a date, or even investing money in the market, confidence is part of what gets you to a great result.

However, overconfidence refers to the phenomenon that people’s confidence in their judgments and knowledge is higher than the accuracy of these judgments.

Put more simply, overconfidence blinds you to the reality of your ability and the circumstances around you.

It’s why 65% of Americans think they’re smarter than others; it’s why more than 50% of business owners view their businesses as more than 90% ethical than their competitors; it’s why 93% of American drivers think they’re above average.

Overconfidence is even partly to blame for the Titanic, which was considered to be an “unsinkable” ship.

It’s called the “mother of all cognitive biases” for a reason!

If overconfidence can sink a ship, it can certainly affect your investing life any number of ways, and sometimes it can take some time to experience the consequences.

For instance, the latest Retirement Confidence Survey by the Employee Benefit Research Institute found that 7 out of 10 workers are confident they are doing a good job saving for retirement and know how much they will need to save to live comfortably, but only 44% have actually tried to calculate how much money they will need.

If these workers feel confident about their retirement savings, but haven’t calculated how much money they will need, they’re acting without supporting evidence. And without “crunching the numbers,” they may never build a big enough nest egg to enjoy a comfortable retirement. That’s a lesson ALL of us should heed.

To help build that nest egg, people have used my quantitative system to invest in blue chip stocks, or to find small caps that can grow 10X. But now I’ve adjusted my proven investing analysis to focus on the stocks that are set to soar … like coiled springs … in just a short time period.

You won’t have to wait years for double- and even triple-digit returns with my Accelerated Income Project. I’ve designed it so you can get the income you need on a regular basis. And no: It doesn’t require using options or any “trick” investing.

How Do You Combat Overconfidence?

I’m a numbers guy. Always have been. Since I was a kid, I’ve loved math and I knew that math was the right way to understand the world.

Said another way, I depend on evidence for my decisions.

And by sticking with the facts, I’ve found stocks that have made huge moves over short periods of time. We’re talking about moves of 100%, 200% and even 500% in months instead of years.

We’re talking about opportunities like Bitauto (BITA). That stock had been flat for months, but my system picked up on the change in company performance, so I did some did some final vetting and decided it was time to “get in.”

Over the next 7 months, the stock soared 209%.

But then, things changed again…

One of Bitauto’s precursors dropped off. My system noticed the drop in performance, and I confirmed it: it was time to “get out.” When you’re sitting on a great profit like the one we had, that can be a tough call to make. It’s all too easy to become too emotionally invested – too stubborn to sell. But numbers don’t lie…and you’re usually better off heeding them.

Sure enough, Bitauto’s stock started heading down. Luckily, because I’d seen the signs, my subscribers and I were well out of harm’s way! And that’s just one stock – just the tip of the iceberg.

Gains like these can be a retirement game changer. A chance to collect triple-digit returns in a short time.

The reality is that as wonderful as the human brain is, it is a terrible tool for investing. It’s like trying to eat soup with a fork.

With myAccelerated Income Project, I’ve taken overconfidence out of the picture; in fact, I’ve removed ALL human biases. Investing decisions are made on cold, hard data.

And a special set of that data is signaling the stocks set to soar … and in a hurry! In fact, my system flashed the “buy signal” on two stocks last Thursday and found two more stocks this week. I released the names only a few minutes ago. If you’re interested, you can find all the details here.

]]>More Evidence That Investors Should Look Forward, Not Backhttps://navelliergrowth.com/uncategorized/2020/05/20200527/
Wed, 27 May 2020 18:57:26 +0000https://navelliergrowth.com/?p=5350Ever been to a concert where the band came back out for a big encore? I’ll bet you answered “yes.” They practically always do.

During the middle of the concert, perhaps the band stuck with songs from the newest album. Ones that you don’t know nearly as well. Then, at some point, the lead singer pulled out an acoustic guitar, the rest of the band disappeared, and half the crowd got up to purchase another $14 stadium beer or margarita.

But that last song…now that got everyone going!

And that was by design. In designing their set list, the band not only planned for an encore. They planned to play their best song last. That way, their fans would leave the concert talking about how amazing the concert was.

In studying Recency Bias, researchers often focus on children, who display this tendency very strongly. In a 2018 study at the University of Rochester, developmental psychologists took a group of 24 toddlers and found that, given the choice between two options, the children chose the second option 85.2% of the time. The study was given the memorable title “Cake or Broccoli?”, suggesting that parents could use the technique to “trick” children into eating their vegetables.

But as an adult, you certainly understand Recency Bias if you’ve ever had an annual performance review at your job.

Odds are that your supervisor remembered a lot of what you’ve done in the previously month but couldn’t remember work completed nine months ago. As a result, you were more likely to be judged for the previous month than the previous year.

And this same bias is likely affecting your portfolio, too.

Now, as I’ve mentioned, this is one of a series of articles: Your Accelerated Income Guide at Market360. Each day, we discuss about how I find “accelerated income” stocks like the ones I’ll recommend tomorrow. These stocks display all the signs of a huge future advance…that can provide you the extra income everyone can use … now more than ever.

So many investors have spent years getting lousy market returns and now they need a strategy to catch-up to live the life they’ve always dreamed. That’s why, in today’s essay, I’m detailing Recency Bias, how it works, and how you can avoid it.

Online Gaming Winner

In investing, Recency Bias occurs when a stock has momentum, either up or down. If a stock has been going up for the last six months, folks naturally believe it is likely to keep going up.

The inverse also happens. If a stock hasn’t gone up in six months, it seems likely to not turn around and go up any time soon.

On a wider level, if it has been 10 years since the last bear market (sound familiar?), investors are more likely to believe one is not coming soon. In February and March, we all learned that wasn’t true!

2015 and 2016 was a rough time for Chinese stocks in particular, after a big “bubble” popped in that market. But during the third quarter in 2016, SINA reported a 21% increase in total revenues and a 21% jump in advertising revenues. Income from operations surged 147%. Net income per share was $0.56, which topped estimates for $0.34 by 64.7%.

Just two months after I made my recommendation, the stock was up 23%. Just between mid-May and June 2017 the stock soared 41%.

Most analysts don’t even cover this kind of stock, or they recommend one after its big run up. That’s where Recency Bias can cost you money.

Don’t let your future be governed by Recency Bias. Instead of eyeballing a stock chart and seeing how it has performed lately, my system runs the numbers using thousands and thousands of points of data (fundamental as well as momentum indicators). It finds the very best names and sends me an alert that a stock is about to skyrocket. Because the alert is developed using only data, I don’t have to worry about falling victim to Recency Bias.

Join me now and you won’t have to worry about that, either.

Instead, you can go back to investing in your retirement. And if you’ve already started investing, the gains with The Accelerated Income Project expecting some of the fastest gains in my career – we’re talking about moves of 100%, 200% and even 500% in weeks or months, not years.

Note: Tomorrow, I’ll release a brand-new Buy Alert for The Accelerated Income Project. I’ll detail two new buys, a tech manufacturer and a diagnostics company. They may sound very different – but crucially, both have the fundamentals required to keep them firing on all cylinders.
Both companies have been beating expectations and seeing Wall Street analysts revise future expectations higher. This is a reliable signal of a big stock surge – and I don’t want you to miss out.

]]>Before You Go “All In” on Any Sector, Read Thishttps://navelliergrowth.com/uncategorized/2020/05/20200526-article/
Tue, 26 May 2020 20:18:25 +0000https://navelliergrowth.com/?p=5352Every week, my virtual “mailbag” fills up with questions about every sector you can imagine. Lately, I’ve been getting plenty of questions like: What do you think about mining stocks? Or oil tankers? How about dividend stocks? Insurance companies?

Now, I could be like lots of other stock “experts”: I could go on TV to declare which sector is the hottest one to “Buy, buy, buy!”

But I’d have to ignore the facts. And the fact is, for growth investors, every sector offers “Strong Buys”…and “Strong Sells,” too!

What’s more, they’re easy to spot – with the right quantitative approach. That’s how I picked all the greatest stocks of my career. I discovered a set of criteria that market-beating stocks all shared…which became the Portfolio Grader I use to scan nearly 5,000 stocks every week.

So, I certainly have my own opinions and I’m happy to share them with my readers, but I always take my cues from the numbers.

Don’t limit yourself to any particular group or theme. Take a set of proven criteria and apply it to ALL kinds of stocks, with exposure to different asset classes. And the process will be quicker and more effective with my free Portfolio Grader tool. Simply visit NavellierGrowth.com, then plug in the stock ticker before making any decisions (buy, sell or hold!)

People have used my quantitative system to invest in blue chip stocks, or to find small caps that can grow 10X. But now I’ve adjusted my proven investing analysis to focus on the stocks that are set to soar … like coiled springs … in just a short time period.

You won’t have to wait years for double- and even triple-digit returns with The Accelerated Income Project. I’ve designed it so you can get the income you need on a regular basis. And no: It doesn’t require using options or any “trick” investing.

Here in Market360, in this series of articles, Your Accelerated Income Guide, we’ve been discussing how I find “accelerated income” stocks. The ones that can shoot up quickly … and provide you the extra income everyone can use … now more than ever.

The biggest single factor in The Accelerated Income Project – and any other smart growth strategy – is reflected in my proprietary Quantitative Grade for the stock.

So, allow me to briefly show you how to interpret that Quantitative Grade…and what it can do for your profits!

Spotting a King of the Ring

One of my most important criteria is strong buying pressure. Think of this as “following the money.” The more money that floods into a stock, the more momentum a stock has to rise. And there’s no doubt about it, we all like stocks that rise!

This is the heart of my proprietary Quantitative Grade.

And the great thing is that my system can spot laggards that are about to become winners. Let’s look at World Wrestling Entertainment (WWE) as an example.

You’re probably familiar with names like Hulk Hogan, Dwayne “The Rock” Johnson and Stone Cold Steve Austin, who all rose to fame in professional wrestling. And the biggest professional wrestling company is WWE.

WWE stock was flat for 15 years. Most folks probably dismissed it. But behind my profit alerts (like my two new buys for The Accelerated Income Project) is a computer system. It doesn’t have biases. It just looks at the numbers. And it can tell you something no one else knows: when a stock is about to break out!

Below you see a chart from when I recommended buying WWE stock in December 2017 through 2019. The stock had achieved a top score of “A” for its Quantitative Grade, and as expected, the flood of major institutional cash kept shares moving higher and higher.

You’ll see above that WWE shot up and returned 150% gains before I recommended selling it in May 2019.

Why did I recommend selling it? In the first quarter of 2019, WWE revealed slowing earnings and sales momentum. WWE reported total first-quarter revenue of $182.4 million, down from $187.7 million in the same quarter a year ago. WWE also announced an earnings loss of $8.4 million, or an $0.11 per share loss, down from earnings of $14.8 million, or $0.18 per share, in the first quarter of 2018.

Both revenues and earnings were worse than Wall Street analysts had expected. Due to the earnings and sales misses, the analyst community aggressively lowered their earnings estimates for subsequent quarters.

My methods like The Accelerated Income Project use these data points to signal when it’s time to get out. If you bought WWE at the time of my original recommendation, and sold when I recommended, you achieved a 149% gain, including dividends.

It can be difficult to let this kind of stock go. A pick going up 150% makes you feel awfully smart.

But we didn’t let our biases control us. We used cold, hard facts to tell us when it was time to get out. And that was a year before fans had to stop attending big events like WrestleMania due to the coronavirus!

This year, WWE stock has taken quite awhile to recover from the sell-off. But even prior to that, the stock didn’t do much for months after my sell alert last May. So, it was nice to have that capital freed up.

Now we’re deploying this system for even better gains in less time with my new Accelerated Income Project. I alerted subscribers to two new picks just last week – and two more have popped up on my radar this week!

Note: At Wednesday’s Accelerated Income Project event, I unveiled a radical new income investment my high-speed research system helped me uncover. I promise, it has nothing to do with dividends, bonds, options, or the other “traditional” income investments you’ve likely heard of. This was much bigger and much more powerful.

]]>Weekly Upgrades and Downgradeshttps://navelliergrowth.com/uncategorized/2020/05/20200526/
https://navelliergrowth.com/uncategorized/2020/05/20200526/#respondTue, 26 May 2020 17:14:31 +0000https://navelliergrowth.com/?p=5347During these busy times, it pays to stay on top of the latest profit opportunities. And today’s blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for 72 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.

This Week’s Ratings Changes:

Upgraded: From Hold to Buy

Symbol

Company Name

Quantitative
Grade

Fundamental
Grade

Total
Grade

ALC

Alcon, Inc.

B

C

B

AME

AMETEK, Inc.

B

B

B

APH

Amphenol Corporation Class A

B

C

B

EL

Estee Lauder Companies Inc. Class A

B

C

B

ETN

Eaton Corp. Plc

B

C

B

MTD

Mettler-Toledo International Inc.

B

C

B

NVR

NVR, Inc.

B

C

B

SCCO

Southern Copper Corporation

B

C

B

TDG

TransDigm Group Incorporated

B

C

B

UPS

United Parcel Service, Inc. Class B

B

C

B

Upgraded: From Sell to Hold

Symbol

Company Name

Quantitative
Grade

Fundamental
Grade

Total
Grade

ACGL

Arch Capital Group Ltd.

C

C

C

BKNG

Booking Holdings Inc.

C

D

C

CE

Celanese Corporation

C

C

C

CMCSA

Comcast Corporation Class A

C

C

C

CNI

Canadian National Railway Company

D

B

C

DIS

Walt Disney Company

C

D

C

DISH

DISH Network Corporation Class A

C

C

C

DLTR

Dollar Tree, Inc.

D

B

C

GD

General Dynamics Corporation

D

C

C

GM

General Motors Company

C

C

C

HLT

Hilton Worldwide Holdings Inc

C

D

C

LNG

Cheniere Energy, Inc.

D

A

C

PPG

PPG Industries, Inc.

C

C

C

VLO

Valero Energy Corporation

C

D

C

WRB

W. R. Berkley Corporation

C

C

C

XLNX

Xilinx, Inc.

D

C

C

Downgraded: From Buy to Hold

Symbol

Company Name

Quantitative
Grade

Fundamental
Grade

Total
Grade

ALL

Allstate Corporation

C

C

C

BR

Broadridge Financial Solutions, Inc.

C

B

C

CBOE

Cboe Global Markets Inc

C

B

C

CME

CME Group Inc. Class A

C

B

C

CMI

Cummins Inc.

C

C

C

CMS

CMS Energy Corporation

C

C

C

COO

Cooper Companies, Inc.

C

C

C

DE

Deere & Company

B

C

C

DUK

Duke Energy Corporation

C

C

C

EXAS

Exact Sciences Corporation

C

C

C

FRC

First Republic Bank

C

B

C

FTS

Fortis Inc.

C

C

C

IEX

IDEX Corporation

C

C

C

LH

Laboratory Corporation of America

B

D

C

LHX

L3Harris Technologies Inc

C

C

C

LNT

Alliant Energy Corp

C

B

C

MDLZ

Mondelez International, Inc. Class A

C

C

C

MDT

Medtronic Plc

B

C

C

MRK

Merck & Co., Inc.

C

B

C

NVS

Novartis AG Sponsored ADR

C

C

C

PGR

Progressive Corporation

C

C

C

ROST

Ross Stores, Inc.

B

D

C

SIRI

Sirius XM Holdings, Inc.

C

B

C

SO

Southern Company

B

C

C

SRE

Sempra Energy

C

B

C

SUI

Sun Communities, Inc.

B

C

C

SYK

Stryker Corporation

C

B

C

TM

Toyota Motor Corp. Sponsored ADR

C

C

C

TRP

TC Energy Corporation

C

C

C

WCN

Waste Connections, Inc.

C

B

C

Downgraded: From Hold to Sell

Symbol

Company Name

Quantitative
Grade

Fundamental
Grade

Total
Grade

AMTD

TD Ameritrade Holding Corporation

D

B

D

AVB

AvalonBay Communities, Inc.

D

C

D

BAC

Bank of America Corp

D

C

D

DEO

Diageo plc Sponsored ADR

D

C

D

DISCA

Discovery, Inc. Class A

D

C

D

DTE

DTE Energy Company

D

C

D

ED

Consolidated Edison, Inc.

D

C

D

EXPE

Expedia Group, Inc.

D

D

D

GPC

Genuine Parts Company

D

C

D

IBN

ICICI Bank Limited Sponsored ADR

F

C

D

JCI

Johnson Controls International plc

D

C

D

LFC

China Life Insurance Co. Ltd.

D

B

D

MFG

Mizuho Financial Group, Inc.

F

C

D

MUFG

Mitsubishi UFJ Financial Group, Inc.

D

C

D

PSA

Public Storage

D

C

D

UL

Unilever PLC Sponsored ADR

D

C

D

To stay on top of my latest stock ratings, plug your holdings into Portfolio Grader, my proprietary stock screening tool. You may get started here.